Oral Answers to Questions

Lord Harrington of Watford Excerpts

Tuesday 27th June 2017 Commons Chamber

[Kirsty Blackman (Aberdeen North) (SNP)]

1. What recent discussions he has had with trade bodies and companies involved in extracting oil and gas from the North sea.

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Richard Harrington)]

My Department is in regular contact with the oil and gas industry. As hon. Members will be aware, my predecessor, my hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman), met industry representatives regularly, both in London and in Aberdeen. On 23 March the Oil and Gas Authority awarded licences for 111 blocks to enable exploration and production across frontier areas—the first licensing round to focus on frontier areas in two decades. I look forward to continuing this relationship, which is very important for jobs and the wider economy. Indeed, in my first week in post I attended a reception at Imperial College London and met several companies and trade bodies in the field.

[Kirsty Blackman]

I thank the Minister for that answer and warmly welcome him to his new post. In 2016 the Chancellor announced that action would be taken to improve the tax regime for late-life asset transfers. In the 2017 Budget he re-announced the same policy, but now an expert panel is to be set up. Can the Minister let me know how many times the expert panel has met so far, and when we can expect the outcomes of its deliberations to be made public, as it says they will be on the gov.uk website?

[Richard Harrington]

I thank the hon. Lady for that question. She and I have worked together in previous roles, and I look forward to visiting Aberdeen, where hopefully she will be able to explain this further. As far as late-life assets are concerned, we realise how important it is to get this right, and not just for the jobs and tax revenue, but for generating further investment. The discussion paper and the panel of experts are considering this. We look forward to hearing a wide range of views and will report our findings at the autumn Budget.

[Stephen Crabb (Preseli Pembrokeshire) (Con)]

The Minister will be aware that over the past decade Qatar has become an increasingly important source of gas for the UK, not least from imports of liquefied natural gas through my constituency. What steps is he taking to ensure that the current diplomatic crisis in the Gulf affecting Qatar does not lead to any disruption of energy supply into the UK?

[Richard Harrington]

As my right hon. Friend will be aware, the Government are monitoring the situation very carefully, and we do not believe that it will make any difference whatsoever to liquefied gas supplies.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

I welcome the Minister to his new post. Getting back to the North sea, the kind of action described by my hon. Friend the Member for Aberdeen North (Kirsty Blackman) is vital, especially to help along the return optimism. The Scottish Government have invested £5 million to explore decommissioning opportunities in oil and gas that could grow many new jobs. When will we get action from the UK Government, and when will we see a robust and comprehensive future energy strategy from the UK Government?

[Richard Harrington]

As the hon. Gentleman will be aware, the Government have been very actively involved in funding seismic surveys and the 3D visualisation centre at Heriot-Watt University. I am looking forward to the next licensing round and to dealing with the strategy he mentioned. I should mention the Kraken development, which the Government have supported, because the first barrels of oil were produced last week, and we look forward to there being 50,000 barrels a day at peak.

[Drew Hendry]

The fact is that the UK Government have been slow to realise the potential of decommissioning, pulled funding from vital carbon capture and storage pipeline projects, failed adequately to address the drop in renewable energy investment and plunged public funds into risky and poor-value nuclear power projects against the advice of experts. When will this Government wake up and take our energy opportunities seriously?

[Richard Harrington]

I am afraid that I must completely disagree with the hon. Gentleman’s view of things. We are committed to supporting the development of a decommissioning industry. I think that there are significant opportunities. We are currently considering options for the delivery of a port and yard, and we will continue to engage closely with all relevant stakeholders as we develop our options.

[Jo Churchill (Bury St Edmunds) (Con)]

2. What steps he has taken to consult businesses on the process of the UK leaving the EU.

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[Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)]

6. What estimate his Department has made of the future level of investment required in the UK’s gas storage facilities.

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Richard Harrington)]

There has been significant investment in the UK’s natural gas supply infrastructure over the past decade. It is highly complex, because we benefit from highly diverse and flexible sources of natural gas. They include: indigenous production from the North sea; six international gas pipelines with Norway, Belgium and the Netherlands; three liquefied natural gas terminals that can bring supply from anywhere in the world; and a number of modern, responsive gas storage facilities. We are confident that market-led investment will continue to deliver secure gas supplies, but I will continue to monitor the position.

[Gareth Snell]

I thank the Minister for his answer. The ceramics industry is a major employer in my constituency. It is very energy-intensive and heavily reliant on a secure supply of gas for business continuity. In the light of the announcement that the Rough gas storage facility is to close, what assurances can the Minister give the ceramics industry that the gas it needs will not run out or become unaffordable?

[Richard Harrington]

As I explained in my answer to the hon. Gentleman’s first question, we have a very diverse range of sources. Analysis conducted by the National Grid and others confirms that the closure of Rough will not cause a problem with security. I give the hon. Gentleman an undertaking to monitor this, with my Department, on a weekly basis.

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[Kirsty Blackman (Aberdeen North) (SNP)]

T4. The National Audit Office recently published a report on Hinkley Point C that is nothing short of damning, describing it as “risky and expensive”. When will the Government listen to the experts and scrap this costly expenditure, and when will they invest instead in carbon capture and storage?

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Richard Harrington)]

If ever you decided not to be Mr Speaker, a career as chairman of the BBC Radio 4 programme “Just a Minute” would be appropriate. In answering the hon. Lady’s question, I will try to keep to your one sentence rule.

The Hinkley Point contract is entirely designed so as not to get the Government involved in expensive capital expenditure, and the nuclear power produced by Hinkley Point will be an excellent part of a mix of power for decades to come.

[Justin Tomlinson (North Swindon) (Con)]

Having access to the next generation of skilled workers is vital for business confidence and growth. Will the Minister consider promoting the opportunities of our ambitious apprenticeship programme through the annual business rate mailer to increase awareness?

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[Richard Graham (Gloucester) (Con)]

Earlier this year, 116 MPs signed a letter I wrote to the Secretary of State urging him to implement the recommendations of the Hendry review for the world’s first ever tidal lagoon. When will a decision be taken?

[Richard Harrington]

The Hendry review also said that there are significant questions as to whether tidal lagoons can be cost-effective, and very complex issues are involved. We are fully aware that a Government decision is needed in order for anything to proceed, but it is absolutely right that we take the necessary time to consider this carefully.

[Several hon. Members rose—]